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Comment by barce | Hacker News Reader

Honestly, I don't see how ridesharing is like stealing music. The ridesharing services are all competing fairly for riders except for Ubers underhanded tactics. The medallions capped the number of taxis so that cabbies could make a fair living, but this created a false scarcity. Market forces were legally not allowed to create more drivers. Yes, I agree that the complaint should be with cities that required medallions in the first place. I disagree with you that the system was ever functional. Anybody from the 1990s in San Francisco remembers 90 minute waits for taxis that were crappy. Uber is way better, and shouldn't have to resort to underhanded tactics to compete.

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No. They are NOT competing fairly, because they figured out (or simply fell ass backwards into it) how to hack the rules. Rideshares have a wildly unfair cost advantage because they do not need to purchase medallions, have commercial auto insurance, pass annual maintenance checks, comply with a long list of regulations, etc. It is the very definition of unfair, if only because the government, for better or worse, has made it that way. Sure it sounds great...until there's a problem. Until the car crashes into a school bus. Or you've got 50,000 gas guzzlers on the road. Or they get into fights with customers. Or there is some other worse criminal activity. Just because you like the app doesn't mean it's justified in its current form.

There may very well be artificial supply with respect to medallions, except there's one major indefensible problem with that position - I don't know any cab drivers living the high life. Do you?

"I don't know any cab drivers living the high life"

I'm pretty sure the cab drivers themselves do not own the medallions.

It depends! Generalizations about taxis are usually false. In San Francisco, cab drivers do own medallions -- you actually have to drive a cab at least 800 hours per year in order to own a medallion.

Not every driver in SF owns a medallion. Drivers who are owners can and do rent out the medallions to other drivers for when the owner is not himself out driving. In this way, medallions can theoretically be utilized 100% of the time. The way it works in SF is that most drivers are affiliated with a fleet (they are not employees of the fleet). The fleets typically (though not always) own the vehicles. The fleets rent the medallions and then hand them out along with the vehicles to the drivers, and the fleets also handle insurance and other infrastructure stuff, plus dispatch. The drivers pay a "gate fee" at the start of their shift to the fleet, and then keep their earnings that they make during the shift (so they start out in the hole and earn out their gate fee (hopefully!) and then anything on top of that is profit to them).

It may be completely different in other cities. My understanding is that in NYC, drivers are typically not medallion owners, and there aren't really fleets in the SF sense -- instead there are taxi yards that offer some of the same functions, but have a less exclusive relationship with taxis and some kind of different business model. But I don't know much about NYC. In cities with less expensive medallions, I'm sure it works differently again.

Source: I am an employee of Flywheel -- we work closely with SF cabs.

EDIT: By the way, again in SF at least, where medallions recently cost $250k (they've gone down since), you might ask "How does a cab driver pay $250k"? The answer was simple: they get loans. There are or were bank loans available to get a medallion, on the basis that medallions gave you the earning power necessary to pay back the loans. So, given that banks are not charitable organizations, if you're wondering who got the excess value created by the legal monopoly of the medallion, part of the answer is "banks."

> There may very well be artificial supply with respect to medallions, except there's one major indefensible problem with that position - I don't know any cab drivers living the high life. Do you?

The cab driver have to pay the medallion holders.

The hack is completely fair, because the existing medallion system is a hack itself, which the cab industry lobbies for in order to ensure regulatory capture.

That position is quite easy to defend if you understand the industry. The reason that you don't know any cab drivers living the high life is in fact because of medallions. Medallion owners don't need to drive taxis. If you control the medallion, you're made. No pun intended.

As recently as July 2014, medallions in NYC were being sold privately for over a million dollars (http://www.nyc.gov/html/tlc/downloads/pdf/july_2014_medallio...).

Some interesting economics on the industry and how we got where we are: http://blog.priceonomics.com/post/47636506327/the-tyranny-of...

> have commercial auto insurance

From the moment you get into any Uber product (e.g. uberX, UberBLACK) to the moment you’re dropped off, your ride is covered by commercial liability insurance

> pass annual maintenance checks

Not just any car can be an Uber. It’s a title reserved for safe, high-quality vehicles that are in exceptional condition. In the U.S., the average model year for vehicles on our platform is 2008, and none are from before 2004+.

> Or you've got 50,000 gas guzzlers on the road

Uberpool: http://blog.uber.com/uberpool

> Or they get into fights with customers. Or there is some other worse criminal activity.

Uber/Lyft are far better in this respect since there is a record of both the driver and passenger (and a log of their GPS coordinates).

Also: Every ridesharing and livery driver is thoroughly screened through a rigorous process we’ve developed using industry-leading standards. This includes a three-step criminal background screening for the U.S. — with county, federal and multi-state checks that go back as far as the law allows — and ongoing reviews of drivers’ motor vehicle records throughout their time on Uber.

https://www.uber.com/safety

https://www.lyft.com/safety

>> pass annual maintenance checks

> Not just any car can be an Uber. It’s a title reserved for safe, high-quality vehicles that are in exceptional condition. In the U.S., the average model year for vehicles on our platform is 2008, and none are from before 2004+.

That does not answer "pass annual maintenance checks". This literally says that it has 10 year old cars on the road that don't have to pass annual maintenance checks. Ouch.

I know this isn't the case for everyone, but... in my state/county, every car on the road has to have an annual (or semi-annual in some cases) safety check to be properly plated and stickered.

Well, they apparently at least require an inspection during on-boarding: http://uberwest.weebly.com/vehicle-inspection.html

Lyft does too: https://www.lyft.com/safety

> It is the very definition of unfair, if only because the government, for better or worse, has made it that way.

I don't understand your definition of "fair." You say "for better or worse," but I would only consider it unfair if government regulations are for better, which I highly doubt.

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